Charging Order? The myth

Land_Registry

Rangers123 wrote: »

I need some help.

I'm selling a house I own with 3 other people. No mortgage or money owed on the house. However I have a standard Form K restriction recorded against my interest on the LR from 2013. It's in the name of Sigma SPV1 Limited c/o HL Legal, which have both ceased trading and been dissolved.

Buyer's solicitor originally said the restriction "acts as if it were a mortgage on my beneficial interest!!!8221;. I pointed out it only requires him to give notice. He contacted the LR who told him "A buyers certificate will not be acceptable in this case. May I draw your attention to Practice Guide 35, section 7.7 and the various associated links which provide our detailed requirements in this respect.

Going by the answer we appear to have given I'd be interested to know what actual Q was asked

I suspect you won't know the exact detail re what was asked so what's the title number involved please?

eggbox

LRR

You've always said the LR have to deal with what is registered on the deeds? So, given that, if the Rangers123 buyer sends notification to the address of the Restrictioner (as noted on the restriction) what would be the LR's position regarding registration of a new owner?

This is because the terms of the Restriction have still been met? Whatever, the legal implications are for ownership the of the debt; the fact remains the related charge would still only protected by a Form K Restriction?

Or am I missing something here?

eggbox

bovver wrote: »

Eggbox
Just wondering how much is worth chasing? £1800 or £18000?

£1800 no chance, £18,000 possibly but I'd still say doubtful? Upwards of £30,000 may get them to consider it? DCA's pay a fraction of the value to own the debt so as long as they are collecting elsewhere it becomes a numbers game. For example,

If a DCA buys 10 x £10,000 debts (£100,000) it will have paid around £10,000 (and probably less) to own those debts. So it only needs 2 of the debts to repay to make a profit. If 6 of the debts repay they have made £50,000 profit.

The consideration for the DCA is do they move on to the next set of 10 debts or waste time on the last 4 who are proving difficult to collect. If they've gone to the trouble to "secure" the debt with a CO and still haven't been paid then, as long as its a rarity (as it currently is) they would most likely write it off as too much trouble to chase and would consider their time better spent chasing "easier" debtors. As I said, DCA's are a business pure and simple they don't take non repayment personally.

Land_Registry

eggbox wrote: »

LRR

You've always said the LR have to deal with what is registered on the deeds? So, given that, if the Rangers123 buyer sends notification to the address of the Restrictioner (as noted on the restriction) what would be the LR's position regarding registration of a new owner?

This is because the terms of the Restriction have still been met? Whatever, the legal implications are for ownership the of the debt; the fact remains the related charge would still only protected by a Form K Restriction?

Or am I missing something here?

I don't think you are missing anything but the post is hence my asking for the title number involved to try and trace the actual enquiry that posed the Q asked.

You will recall that we have discussed the issue of asking the right Q before - in this case I am wondering if the Q related to the company's situation, hence referral to PG 35 as that deals with corporate insolvency.

Far better for me to ask the right Q before I try and give the right A here. And if we have got something wrong in our answer then I have a chance to correct that error.

eggbox

Thanks LRR

Whilst the question asked would be worth knowing; are there any circumstances that can arise, whereby, a buyers certificate would "no longer suffice" for a std Form K Restriction if that is, actually, what the LR have stated?

Land_Registry

eggbox wrote: »

Thanks LRR

Whilst the question asked would be worth knowing; are there any circumstances that can arise, whereby, a buyers certificate would "no longer suffice" for a std Form K Restriction if that is, actually, what the LR have stated?

eggbox - we don't really do hypothetical as every application, as you appreciate, is dealt with on merit

As our PG 76 section 4 states
A charging order affecting only the beneficial interests under a trust is liable to be overreached along with those interests by the operation of sections 2 and 27 of the Law of Property Act 1925. Accordingly, a Form K restriction will be usually be cancelled automatically, without application, when a transfer which appears to overreach the beneficial interests is registered.

I've emboldened the text which explains how it will always be if, buts and maybes until an application is submitted.
The emboldened and italicised text explains how it is the Transfer and certificate provided that come first.

The solvency of the creditor is not, in my experience, relevant as that's not the point re overreaching and there is nothing that I am aware of that requires us to check that detail as part of the registration process.

Hopefully Rangers123 can share the title number and we can clear up what has happened and why. That may then give you a specific example of where a certificate will no longer suffice

eggbox

Thanks again LRR

Rangers123

Land_Registry wrote: »

Going by the answer we appear to have given I'd be interested to know what actual Q was asked

I suspect you won't know the exact detail re what was asked so what's the title number involved please?

I have the benefit of the full exchange:

Dear Sirs



We act on behalf of the proposed purchaser of the above property which is registered under title number xxxxxxx.



You will see there is a restriction in entry 3 of the proprietorship register to the effect that a certificate is required by the applicant for registration or their conveyancer that written notice of the disposition was given to Sigma SPV1 Limited, etc.



We understand this company is now dissolved.



In order to take clear of this restriction, can you confirm that a simple certificate from the buyers conveyancers will enable registration of the change of ownership to be completed and the restriction removed.



Yours faithfully

To which the full reply was:

Dear...

Thank you for your e-mail of 15 June 2018

A buyers certificate will not be acceptable in this case.

May I draw your attention to Practice Guide 35, section 7.7 and the various associated links which provide our detailed requirements in this respect.

Yours sincerely

HM Land Registry

Land_Registry

Rangers123 wrote: »

I have the benefit of the full exchange:

Dear Sir

We act on behalf of the proposed purchaser of the above property which is registered under title number xxxxxxx.

You will see there is a restriction in entry 3 of the proprietorship register to the effect that a certificate is required by the applicant for registration or their conveyancer that written notice of the disposition was given to Sigma SPV1 Limited, etc.

We understand this company is now dissolved.

In order to take clear of this restriction, can you confirm that a simple certificate from the buyers conveyancers will enable registration of the change of ownership to be completed and the restriction removed.

Yours faithfully

To which the full reply was:

Dear...

Thank you for your e-mail of 15 June 2018

A buyers certificate will not be acceptable in this case.

May I draw your attention to Practice Guide 35, section 7.7 and the various associated links which provide our detailed requirements in this respect.

Yours sincerely

HM Land Registry

Many thanks for sharing the details. As intimated earlier the devil is always in the detail re the Q asked. And I suspect, but don't know, that by asking "in order to clear the restriction.....' they got the reply they did as it intimated, in one way, that they wanted the restriction removed.

Overreaching has not been mentioned although on the flip side the final sentence "will enable registration of the change of ownership to be completed and the restriction removed." was a possible clue due to the order mentioned.

so I suspect we focussed on the 'dissolved' and 'removed' rather than the form of restriction and wider scenario of overreaching.

Do you have the title number so I can check further and confirm please? Without it I'm simply guessing so can only comment on what I think has happened and that doesn't solve the issue for you.

If you don't wish to quote it here then I'd suggest going back to solicitor and asking them to consider replying to our email by clarifying that you don't want the restriction removed per se but are asking whether the company's dissolution prevents their restriction from being overreached when the property is sold, or similar but refer to overreaching

eggbox

Land_Registry wrote: »

Overreaching has not been mentioned although on the flip side the final sentence "will enable registration of the change of ownership to be completed and the restriction removed." was a possible clue due to the order mentioned.

Thanks for the update LRR and it does appear, as suspected, that the LRR has given an answer to "pre-removal" of the restriction prior to sale?

And whilst this certainly doesn't apply to yourself; the above quote does indicate what I have been saying about certain organisations not being as helpful as they could as it wouldn't have breached the "we can't give advice" rule to confirm overreaching?